Insurers must be forced to compete
TEXT OF COMMENTARY
Kai Ryssdal: Commentator Robert Reich points out that another time-tested way to cut costs in the health-care system -- competition -- is strangely missing from the Senate debate.
Robert Reich: The health-care bill now moving perilously through the Senate still relies overwhelmingly on private, for-profit insurers. They don't compete very much against one another and will have every incentive under the bill to compete even less.
The bill gets rid of the public option and lets people who aren't covered by their employers buy into a system similar to the plan that federal employees now have. The federal government's Office of Personnel Management selects from among private insurers.
But that's no answer. Premiums under the federal employee benefit plan increased nearly 9 percent this year -- in part because of insufficient competition among the private insurers it depends on.
According to data from the American Medical Association, only a handful of insurers dominate most states. In nine states, two insurance companies control 85 percent or more of the market. In Arkansas alone, the Blue Cross plan controls almost 70 percent of the market.
In light of all this, you'd think the Senate bill would at least subject the insurance industry to the antitrust laws. But no.
Remarkably, the Senate bill still keeps Big Insurance safe from competition by preserving its privileged exemption from the antitrust laws.
This makes no sense. Without a public option to compete against private insurers, and without antitrust laws to make sure they're competing against one another, insurers have every incentive to combine into a handful of giant companies that will suck every health dollar out of our pockets.
If Americans are going to be required to get health insurance, health insurers have to be forced to compete, one way or the other.
Ryssdal: Robert Reich is a professor of public policy at the University of California, Berkeley.